Predation Through Regulation: the Wage and Profit Impacts of Osha and Epa

29 Pages Posted: 25 Jun 2004 Last revised: 17 Jul 2021

See all articles by Ann P. Bartel

Ann P. Bartel

Columbia Business School - Finance and Economics; National Bureau of Economic Research (NBER)

Lacy Glenn Thomas

Emory University - Department of Organization & Management

Date Written: July 1985

Abstract

This paper documents the importance of studying the indirect effects of OSHA and EPA regulations -- the competitive advantages which arise from the asymmetrical distributions of regulatory impact among different types of firms. We argue that if the competitive advantage gained through indirect effects is sufficiently large, it can more than offset any direct costs producing a net benefit for the regulated firm and its workers. The indirect effects of OSHA and EPA regulations arise in two ways. The first source is compliance asymmetries, whereby one firm suffers a greater cost burden even when regulations are evenly enforced across firms. The second source is enforcement asymmetry, whereby regulations are more vigorously enforced against certain firms. Earlier research shows that these asymmetries do exist and are based on firm size, unionization, and regional location. In this paper we empirically document that the indirect effects produced by these asymmetries mitigate the direct costs of regulations for manyfirms. Large, unionized firms in the Frostbelt are clearly gaining wealth at the expense of small, nonunionized firms in the Sunbelt.

Suggested Citation

Bartel, Ann P. and Thomas, Lacy Glenn, Predation Through Regulation: the Wage and Profit Impacts of Osha and Epa (July 1985). NBER Working Paper No. w1660, Available at SSRN: https://ssrn.com/abstract=338752

Ann P. Bartel (Contact Author)

Columbia Business School - Finance and Economics ( email )

3022 Broadway
New York, NY 10027
United States

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Lacy Glenn Thomas

Emory University - Department of Organization & Management ( email )

1300 Clifton Road
Atlanta, GA 30322
United States

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
28
Abstract Views
640
PlumX Metrics